Introduction: Capitalism is an economic system in which the means of production are privately owned and controlled. Capitalist economies are characterized by competition in the private sector, and by the profit motive, and by the fact that there is expected to be limited government involvement or interference in the economy as a whole. In a capitalist economy, the law of supply and demand largely determines what gets produced and what is sold. Supply and demand also dictate how and where goods and services are distributed. A society would be considered capitalist if most production is carried on by employees working with means of production owned by their employer, and when most employees produce goods or services that belong to their employer.
According to the answers.com website online, Marx distinguished between the "use value" which he described as what a commodity provides to its buyer, "value" which Marx described as the socially necessary labor time it embodies, and its "exchange value" which Marx defined as the amount of labor-time the production and marketing of the commodity requires. According to Marx, commodities exchange in the ratio of the time taken to produce one item of each kind.
Marx wrote that the utility of a product or service creates a use value. A product or service has use value only because human labor has been embodied or invested in it. According to Marx, something can be a use value to human beings without having value. This is the case whenever an item's utility is not due to human labor. Examples of this would include fresh air, clean water, and unspoiled natural beauty (Use Value).
According to an essay published on the Vanderbilt University website, according to Marx a commodity is something produced for the specific purpose of being exchanged. A more precise explanation of exchange value is offered. We read that the exchange value of a commodity reflects the amount of necessary l
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